Ford Stock Soars After Beating Expectations with Strong Q4 Sales and Profit Guidance

Ford Stock Pulls Higher After Reporting Strong Q4 Sales

January 31, 2024

Ford’s Q4 Sales Exceed Expectations

Ford’s stock surged after hours as the automaker reported fourth-quarter sales that exceeded expectations. The company also projected a full-year profit outlook that beat estimates, reflecting strength in the overall US auto sector. Despite this positive performance, Ford’s electric vehicle (EV) unit is projected to incur more losses in the upcoming period.

Solid Financial Results

Ford reported top-line revenue of $46 billion for the fourth quarter, $2 billion more than the previous year. This revenue outperformed Bloomberg’s estimated revenue of $40.35 billion. Ford’s adjusted earnings per share of $0.29 also surpassed the estimated $0.13. The company’s adjusted earnings before interest and taxes (EBIT) stood at $1.1 billion, as opposed to the expected $988.2 million.

For the full year, Ford achieved $10.3 billion in adjusted EBIT, at the upper end of its full-year 2023 adjusted EBIT outlook. This result includes $1.7 billion in strike-related lost profits. Ford now expects adjusted EBIT of $10 billion to $12 billion for the year 2024.

Positive Outlook Despite EV Unit Challenges

While Ford expects its EV unit to face further losses in the next period, the company remains confident in its long-term profitability. Ford’s full-year profit outlook for 2024 is below the previously projected range but exceeds market estimates. General Motors (GM), Ford’s rival, issued a 2024 profit guidance that matched expectations for 2023.

“The guidance presumes flat to modestly higher full-year U.S. industry volume, with overall lower vehicle pricing,” Ford stated in a press release.

Improving Capital Efficiency and Future Initiatives

Ford is committed to enhancing capital efficiency and returns on investments. Strategic actions to achieve this goal include selectively reducing investments and raising expectations for new initiatives’ returns. Ford CFO John Lawler emphasized the objective of improving the total adjusted return on invested capital from 14% in 2023 to 20% in the coming years.

Ford’s Various Business Units’ Performance

Ford Blue: [highlight Ford Blue’s performance here]

Ford Model e: [highlight Ford Model e’s performance here]

Ford Pro: [highlight Ford Pro’s performance here]

Regarding Ford’s Model e business unit, the company incurred an EBIT loss of $4.7 billion in 2023. Ford attributes this loss to intense market competition and investments in the development of next-generation EVs. For 2024, Ford anticipates wider losses in the Model e unit, projecting an EBIT loss of $5 billion to $5.5 billion.

Focus on EVs and Future Perspectives

Ford CEO Jim Farley expressed his belief in a significant change in the US EV market and emphasized the company’s focus on making smaller, profitable EV products. Ford’s investments in EVs this year will primarily contribute to the development of next-generation EVs, which are expected to be profitable within the first 12 months of their launch. Farley revealed Ford’s efforts in creating a low-cost EV platform to compete with Tesla’s upcoming $25,000 EV.

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Overall Sales and Ford’s Outlook

In January 2024, Ford continued to perform well, with US total sales for the year 2023 increasing by 7.1% compared to the previous year. This represented Ford’s best year since 2020. The company achieved strong sales in various segments, including trucks and hybrids/EVs.

Ford CEO Jim Farley is optimistic about the future, believing that 25% of all F-150 pickup sales will be hybrids soon. The company is currently building hybrids at full capacity, demonstrating its commitment to meet customer demand.

About Ford

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